May 10/07 9:16 am - Cycling Struggles for Support as Doping Takes a Toll

Posted by Editor on 05/10/07

Cycling Struggles for Support as Doping Takes a Toll

The Canadian Centre for Ethics in Sport (CCES) provided the following article from an unnamed source, which we have reproduced in its entirety:

By Doreen CarvajalPublished: May 3, 2007

PARIS: With the Tour de France approaching this summer, the sport of cycling is taking brutal spills in corporate suites, where deals are made to sponsor competitions with cold attention to return on investment.

The annual Championship of Zurich - which had endured for almost a century, including through World War II - was canceled last month by Swiss organizers unable to enlist new sponsors to replace ex-backers spooked by the doping scandal that ensnared the American rider Floyd Landis.

So was the Tour of Utah, which was abandoned after organizers failed to attract enough sponsors to back the grueling six-day, 500-mile, or 800-kilometer, race in July through the Wasatch Mountains.

On May Day, riders in the Frankfurt Grand Prix sprinted by a giant grain silo that belongs to the Germany brewery Henninger, which backs the 46-year-old event. But organizers had struggled to court other sponsors to replace ones that retreated.

"It was difficult to get the new ones," said Angelika Müller, a spokeswoman for the event, based in Frankfurt am Main. "The sponsors all talked to us about the image of cycling because of all the doping affairs with Landis and Jan Ullrich. We were only able to get them because they were contacts we had for many years."

Landis is casting a shadow that is particularly affecting less-prominent races.

Landis, who won the 2006 Tour, tested positive for synthetic testosterone after his victory in the 17th stage. He faces the loss of his title and a two-year ban if an arbitration panel, scheduled to meet May 14, upholds the positive test.

Since the Landis affair became public, the headlines about doping scandals have been relentless, with more top riders tarnished by a Spanish doping investigation called "Operación Puerto."

For sponsors, those headlines compounded another weakness in the sport of cycling: the loss of an international hero like Lance Armstrong, the seven-time Tour de France winner and cancer survivor who did not race in the tour last year.

"Of course, the partners and sponsors of the Tour de France were concerned" about the issue of doping, said Laurent Lachaux, marketing director for the Amaury Sport Organization, which owns the Tour de France. "We carefully studied this with all our sponsors to see very frankly if staying was an issue for them or leaving was the best solution. We have been in discussions for four or five months with the top group. Some of them are saying yes, some are carefully studying the future, but none have actually said no."

IFM, a sports research company based in Germany that measures sponsorship impact, calculates that cycling has plunged as a marketing investment since the start of the 2007 season in March. The early season included four pro tour events: Paris-Nice, the Tirreno-Adriatico and Milano-Sanremo races in Italy and the Ronde van Vlaanderen in Belgium.

According to IFM, three of those races suffered a drop in total live audiences with the 91-year-old Belgian tour faring the worst with a 77 percent decline from a year earlier.

That drop depressed the worth of cycling sponsorships, which are valued at about 10 percent of the cost of buying traditional advertising time in the same time slots, according to Jens Seeberger, spokesman for IFM.

Tracking six key television markets in the United States, France, Germany, Italy, Spain, and Britain, IFM found that television coverage of cycling events started to drop off after the Landis affair from almost eight and a half hours to five and a half hours. With the start of the 2007 season, Spain and Italy dropped live coverage.

"It's a very serious problem for the sponsors and many are thinking about their activities," Seeberger said. "Our advice is not to invest right now in cycling. The sport has to be clean. There's a lot of negative news right now and it affects awareness and images. So let's see what will happen."

The sport of cycling has never attracted the kind of sponsorship money that flows to soccer, Formula One or America's Cup sailing, where big companies like BMW and Oracle are backing a sailing challenge costing more than €150 million, or $203 million. But large companies still find cycling appealing because costs are so much lower. In the top sponsorship tier for the Tour de France, four companies are each paying yearly an average of between €4 million to €5 million.

Typically, events like the Tour de France appeal to national sponsors like Champion, a French supermarket chain, Crédit Lyonnais, a French bank, and Nestlé Aquarel, the bottled water brand based near Paris that has sponsored the tour since 2001.

During the last years of the Lance Armstrong era, which ended in 2005, broadcasting coverage was on the rise and cycling was poised to build itself into a mainstream sport with appeal to global sponsors. But when Armstrong departed, the hours of television coverage of the tour in the world's key television markets fell from about 26.5 hours to 23.5.

"It's much different this year. The Landis thing didn't really help much," said Henri van der Aat, managing director of Trefpunt, a sports consulting agency in Amsterdam that advises Rabobank on its cycling and cultural sponsorships. "In every boardroom, if you talk about sponsorships for any big cycling race, they all discuss the doping problems."

Rabobank ultimately decided in January to continue, extending its team contract from 2008 to 2012. The company's strategy, van der Aat said, was to promote the brand of the bank around cycling from pro racing to children's tours, reducing the risk for the bank by not concentrating entirely on professional racers.

In April, John Eustice, a former cyclist and U.S. pro champion who now promotes and organizes tours, was called in to rescue the U.S. Open Cycling championship in Virginia, which struggled to find a title sponsor and lost its director over the organization's financial problems.

Ultimately, the race took off in early April with Eustice as the executive director of the event and commentator for a two-hour NBC broadcast. A public supporter of Landis, Eustice says that the real issue spooking sponsors is that the sport of cycling does not manage its public travails well.

"I think the problem is not so much doping," Eustice said. "It's the fact that the people who run cycling let it turn into such a circus. I think cycling is courageous to fight in a clumsy way, but they seem like a sport that no one controls."

Some competitions struggled to raise financing before the doping scandals, but bad publicity about cycling added new burdens. Organizers of Zurich's traditional one-day cycling race in October said that Landis's downfall while riding for the Swiss Phonak team - named for a hearing systems company - had a shattering effect on local sponsors.

Lachaux, the marketing director for the Tour de France, said cycling had weathered other crises in the past and sponsors have returned. In 1998, the Festina team was expelled from the Tour after a team car was found with performance-enhancing drugs. But Festina, a Swiss watchmaker, created a foundation to combat doping and continued to sponsor the Tour de France. The company signed a five-year contract last winter, according to Lachaux.

Hubert Genieys, who is in charge of sponsorships for Nestle Aquarel, said the company considered cycling a good value because of its low costs. It also remains satisfied with the efforts of tour organizers to root out doping problems.

"The question is, do we continue?" Genieys said. "That decision has not been taken and will not be until 2008 when we have had time to see the new approach. If we have all the guarantees after 2009 that cycling will be safely on its way to rejuvenate its image and to eradicate the drug issue, we will probably stay in the boat."